Hire Licensed and Respected Home Improvement Companies

Finding the right home improvement company to update or renovate your home doesn’t have to be a stressful and disheartening process. Yet most homeowners have no idea where to start because they are bombarded with bad press about contractors who are dishonest, inexperienced and downright unreliable. Homeowners today are wary of who they can trust.

Home Improvement Complaints and Scams:

“With lower-rate mortgages tempting homeowners to trade up to a bigger house, or to refinance and expand or repair their existing home, we’re finding that construction and home improvement activity is way up, and with it is the number of complaints in those areas,” said Consumer Protection Commissioner Edwin R. Rodriguez. (Consumer Affairs, January 2006)

“Home improvement complaints rank as the top consumer complaint in Connecticut and elsewhere across the country,” Rodriguez said. “While home improvements themselves can be expensive, any problems that arise often cost consumers thousands more to fix. Unfortunately, there have been many cases where a homeowner is left with a huge problem and has no financial means of getting it repaired.” (Consumer Affairs, June 2006)

Basic scams usually do not occur with accredited companies, so make sure the company you use is licensed. “The law requires home improvement contractors to register and follow certain procedures for a reason, to protect homeowners,” Rodriguez said. “This includes complying with state laws that assure consumers a level of financial protection.” (Consumer Affairs, June 2006)

Be Wary of Certain Sales Tactics:

According to the National Consumer Law Center at consumerlaw.org, unscrupulous contractors mostly target senior citizens. Do not fall into the trap of the following sales tactics that take advantage of homeowners:

o “Bait and Switch” – offers low prices for installed items like windows and home siding, and then tells the homeowner the item is out of stock and can only be replaced with a high-priced substitute.

o Misrepresent the urgency of a needed repair.

o Claim the item is more expensive than advertised because it has to be “custom made” to fit the home.

o Misrepresent that the consumer is receiving a discount because the home is selected to model the repair when, in reality, the consumer is paying market price or more.

o Misrepresent the energy savings, health benefits and value added to the home.

o Misrepresent the terms on which financing is likely to be arranged.

Practices to Follow for Finding the Right Contractor:

If you hire a contractor with a license and a good reputation (such as the Home Remodelers GroupĀ®), you are guaranteed to avoid unfinished work, financial wrongdoing and fraud.
The National Consumer Law Center has a list of suggestions for homeowners looking for a home improvement company:

o Do not hire an unknown contractor that solicits business by knocking on your door. Deal with companies recommended by friends or reputable building supply stores.

o Before agreeing to hire any home improvement contractor, get a second estimate for the same work from another contractor.

o Get references for the contractor and speak to those references. Ask about satisfaction and any problems that arose.

o Look at other work performed by the same contractor.

o Many states require contractors to be licensed and/or bonded. Check with the state licensing body to see if the contractor you are considering is licensed.

o Get a written contract describing explicit specifications of the work, the price (including details of any financing or credit terms), the responsibility for cleaning up, and the hourly rate for any added work. Ask for guarantees and other promises to be made in writing.

o If the written documents are different from oral promises, do not sign them.

o A 3-day right-to-cancel applies to door-to-door sales and home improvement loans even after the papers have been signed.

o Do not allow a contractor to begin work until financial arrangements to pay for the work are complete.

o Do not agree to pay the final payment until the project is finished.

o Do not consolidate other debts with a home improvement loan.

o If problems with a contractor or home improvement lender arise, get help from a lawyer or housing counselor immediately.

Take Care of Your Home:

The Pennsylvania Home Improvement Consumer Protection Act and You

With the overwhelming rash of repair work that will be needed to take care of the damage caused by one of the worst winters on record, many people will be looking for contractors to do work on their homes. But who should they hire? Will hiring a contractor registered under the state’s recently enacted Pennsylvania Home Improvement Consumer Protection Act allow them to move forward with confidence?

Pennsylvania begins its first full year with this new law that requires contractors who conduct any sort of home improvement to register with the Bureau of Consumer Protection, which is part of the Attorney General’s Office. However, the question is how much does this new law really protect you, the consumer? Unfortunately, there are many homeowners who thought that being registered meant that the state had approved these contractors and the quality of the work they do. Many of these homeowners have since found out that is not the case.

While the law represents a first step in the right direction, consumers should not allow it to give them a false sense of security. Smart consumers still need to do their homework in order to protect themselves. A quick look at what the law does and does not do will tell you why.

For years, it has been said that “all you need to be a contractor in Pennsylvania is a hammer and a pick-up truck.” Perhaps that has been one of the reasons that the majority of Pennsylvanians are not pleased with the quality of the work done on their homes. A national survey found that fifty percent of people would not recommend their contractor to another person. In Pennsylvania, the odds are even worse because, until now, there was no registration, licensing or certification process.

Many states have licensing and certification requirements for contractors. Most require the contractor to take some kind of written or physical test. Some require a contractor to be bonded with the state. Until last July, Pennsylvania was one of the few that did not require anything. At least now, Pennsylvania requires a contractor to be registered. What does registration mean, who needs to be registered, and how does the registration system ensure accountability? Can a registered contractor be trusted to treat you, your home and your property with the respect and care you expect and deserve?

Under the new law, essentially all improvements to your home and property must be done by a registered contractor. With the exception of landscapers, anyone making more than $5,000 a year doing construction, installation, or work dealing with non-decorative structures, must be registered with the state.

To register with the state, a contractor must provide his name, address, phone number, date of birth, driver’s license number, and the address, name, and description of his business. He must also provide the names of all his business partners. The State also requires a statement on whether the individual applying has ever been convicted of a criminal offense related to home improvement, fraud, theft, or a crime of deception.

Registration costs a contractor $50 every two years. In return, the state provides a unique contractor ID number. This number must appear in all written material and advertisements that carry the name of the business. Most importantly, the number must appear on all contracts the company prints. If you are considering a contractor who does not display his number, there is a real possibility that he is not, in fact, registered with the state of Pennsylvania.

To prove reliability, a contractor must state whether or not he has filed for bankruptcy, or was decided against in court for a home improvement complaint within the past ten years, and whether or not he has ever been suspended or debarred from participating in any Federal, State, local, or not-for-profit program.

Lastly, a contractor must provide proof that he possesses a $50,000 liability insurance to cover any damage to the home he is working on or any personal injury to the homeowner. Although it is required by Pennsylvania employment law, a contractor does not have to prove that he has Workman’s Compensation insurance to cover his people who might get injured while working on your home.

One critical side note about contractor insurance: make sure your contractor has it. Do not risk simply taking the contractor’s word on this. A reliable contractor needs proper and adequate insurance coverage to protect you. While $50,000 of liability insurance may seem like a lot, it is only a drop in the bucket compared to the value of most homes. If the contractor accidentally burns your home down, the maximum you’ll get, assuming there are no other claims against him is $50,000. A reputable contractor will have at least one million dollars worth of liability insurance to protect homeowners.

Workman’s Compensation insurance covers any employee of the contractor who happens to get injured while working on your home. The contractor does not need to have this insurance on himself, but he must have it on anyone who works for him. Consequently, every person who is working on your property must be covered by Workman’s Compensation insurance or have their own individual Liability insurance policy and State registration number. If they do not and they get injured, you, the homeowner, could be liable for their injuries. Additionally, most Homeowners’ insurance policies exclude contractor caused damage or injury from their coverage. Because they cannot assess the risk associated with the contractor you hire, they rely on you to determine whether or not your contractor is adequately insured.

The law provides for an internet-accessible database which lets you know if a contractor is registered and if he has any kind of criminal background. That is it! The database does not provide any assessment of the reliability of the contractors. There is no way to tell if a contractor has left behind a string of unsatisfied customers and shoddy workmanship. Being registered is no assurance of quality, professionalism or honesty! Anyone can register today as a contractor with absolutely no training or experience. On the state’s database, there is no difference between that person and an established, reputable company. So don’t expect the state to protect you. It is still up to you to protect yourself.

The laws defining home improvement fraud are equally weak. Essentially, fraud is committed when a contractor misrepresents the real cost of a job, fails to do the work he is paid to do, or deviates from the written and signed contract’s plans, specifications and costs without a written change order. When a contractor misrepresents his skills or does a hackneyed job, he does not violate the definition of home-improvement fraud outlined in the law.

The problem with many home improvements and repairs is you can’t see the end result until the work is done. In most cases, at that point it is too late to get any remedy without a lot of time and aggravation. A smart consumer spends the time upfront to make sure they have a reliable, qualified contractor.

In summary, while the new HICPA law is a step in the right direction, it is not the type of law that is going to cure the ills caused by incompetent contractors. Don’t be lulled into a false sense of security that it does; that responsibility still lies with you, the homeowner. To get the kind of job you need, want and expect, you must take control. Do your homework, educate yourself, understand your options, and check out references. As with any major investment, it always makes sense to be a smart consumer.